Portland, Oregon is occupied territory. It was invaded years ago by a non-native species of political animal from back east who took over our political and cultural institutions in order to try out their utopian socialist dreams on our great state.
This blog will chronicle the insurgency that is trying to free Oregon from the occupiers' grip by shining a bright light on their most egregious schemes.

Saturday, May 20, 2006

Oregon School Trust Lands

One of the little known elements of Oregon's school revenue is the "Oregon School Trust" lands that are managed by the state. The state is statutorily required to maximize revenue from these lands, and the money flows to the Common School Fund.

The Trust lands include the Elliot State Forest, a 93,000 forest near Coos Bay, and a slew of rangeland. The state is now in the middle of a long term "forest management plan" which will specify which parts of the forest are harvested, the annual cut, habitat preservation, etc.

According to the state, the market value of the forest is upwards of a half a billion dollars. The management plan expects to yeild about 4% on that value. Why so low? Mostly because the state is uniquely ill-suited to actually manage a forest for maximum revenue, because priorities other than revenue maximization always carry the day when they grind though their bureaucratic public planning processes.

All the greenies have the ear of the state bureaucrats who draw up the plan. So they accept a far lower yield than they could get if they actually followed the state law and maximized revenue from the forest.

Who comes out on the short end? The schoolkids. Just the forest lands - ignoring all the other lands held in the trust - could easily spin off an additional $20 million to the Common School Fund.

John Charles of the Cascade Policy Institute has a great idea how to do it: Sell the Elliot State Forest and let the Oregon Investment Council invest the proceeds on behalf of the Common School Fund.

The OIC has routinely made 15+% on the funds under its management. But for the sake of argument let's assume that the proceeds from selling the forest simply yeild a long term average of 8%. (This is a very realistic long term average return for a portfolio of financial assets.)

That means $20,000,000 each year additional fund for the schools.

Who is making the decision to short Oregon's schoolkids by $20 million? The Governor, Treasurer and Secretary of State form the board that makes this decision. Together they are each year deciding to take $20 million out of the schools in order to placate their buddies the environmental groups.

(Remember - the actual figure is probably far far higher than $20 million. If they sold off the range lands as well, and if the actual return was closer to the OIC's long term average, the annual return could easily be upwards of $80 million.)

Ron Saxton should ask Governor Kulongoski why he hasn't fulfilled his statutory responsibility to maximize the revenue from these trust lands at a time when he is touting his plan to increase school funding.